The collaborative ecosystem known as the sharing economy has revolutionized the way we access goods and services and indeed has become a deep socio-economic trend changing modern lives. This is particularly true of the younger generations, but change is increasingly engulfing all adult groups.
The sharing economy has been defined as the set of platforms and activities that allow participants to gain and sell temporary use or ownership of assets and resources. While a more classical definition includes activities where private parties exchange their goods and services, a broader notion has come to include all online marketplaces that generate improved access and more competition, even those managed by profit-driven corporations.
For consumers, the model significantly lowers ownership costs and increases accessibility relative to traditional means. For vendors, it creates value from the productive use of underutilized resources. It also has a positive environmental impact.
Behind the rapidly growing sharing economy lies the exponential advance of the Internet, online communications and digital payments. This is shifting value in the consumer and services markets away from traditional providers. Home-sharing site Airbnb, for example, now has more listings than the world’s top five major hotel brands combined.1
About 17% of adult Americans have transacted via collaborative platforms, according to a study,2 while in another survey,3 23% of respondents in the Eurozone said they have done so. The value of the global sharing economy may grow to $335 billion by 2025 from $14 billion in 2014, PwC estimates.4 Their study only covered sharing activities in the automotive, hospitality, finance, staffing and media streaming industries.
A targeted investment in the sharing-economy megatrend
Naturally, there are intermediaries that benefit from and drive the sharing economy’s wealth creation. To gain access to these beneficiaries, STOXX has launched the STOXX® Global Sharing Economy Drivers Index as the latest addition to its Thematic Indices family.
The index seeks to cover eight themes driving the shared economy:
- mobility (vehicle sharing, on-demand ride services)
- streaming (online media content)
- food-delivery services
- retail and consumer goods (organized marketplaces and goods rental portals)
- tourism and accommodation
- asset sharing (renting or leasing)
- finance (peer-to-peer lending, crowdfunding)
- human resources (skills freelancing, e-learning, co-working spaces)
The index is derived from the entire developed and emerging markets universe tracked by STOXX. It uses the very granular RBICS business segmentation data to obtain a detailed breakdown of the revenue sources of eligible companies. The index selects companies with at least 50% exposure to 17 sectors associated with drivers of the sharing economy.
For a list of the 17 sectors, please visit the index’s methodology guide.
A responsible tilt
A singular characteristic of the STOXX Global Sharing Economy Drivers Index is that its methodology additionally excludes companies that are deemed by STOXX’s partner Sustainalytics to be in contravention of the ten United Nations Global Compact principles, as well as those involved in the production and sale of controversial weapons.This brings the resulting portfolio in line with basic environmental, social and governance (ESG) policies of institutional and retail investors.
Index components are weighted by their free-float market capitalization multiplied by their aggregate revenue exposure to the sectors listed above.
The STOXX Global Sharing Economy Drivers Index has 54 constituents, including Amazon.com Inc., Netflix Inc., eBay Inc., Booking Holdings Inc. and Spotify Technology SA.
Source of huge growth potential
STOXX’s Thematic Indices are designed to allow investors to capture the economic upside of disruptive megatrends and concepts. The early and accurate identification of themes and topics driving big, cross-industry shifts can open a window to unique growth potential. The STOXX Global Sharing Economy Drivers Index fits right into this approach.
1 Avery Hartmans, ‘Airbnb now has more listings worldwide than the top five hotel brands combined,’ Business Insider, Aug. 10, 2017.
2,4 PwC, ‘The Sharing Economy.’
3 European Commission, ‘Flash Eurobarometer 467,’ October 2018.